Category: Selling Advice

Advice for home sellers in Lake Oswego, Oregon

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Looking Ahead at 2013

Every winter the various title companies bring in economists to forecast what the coming year is going to look like, and every year I make it a point to attend at least one of these presentations. I gotta tell you, for the last 5 years, it’s been painful. Doom and gloom and hang onto your coat tails cause it’s gonna be a wild ride. What a breath of fresh air it was two weeks ago to go to the economic outlook program put on by WFG National Title.

 

The guest speaker was Patrick Stone, the President and CEO of Williston Financial Group. I am not going to quote Mr. Stone directly as my note taking was not done verbatim. I am going to instead share with you the general idea of what I took away.

First, after the recession, as a country and as individuals, we are well positioned for economic growth. This is because the recession allowed us to restructure out debt to get rid of it and to refinance it at a lower cost. This has created more liquid assets for both consumption and savings.

Second, as a state, Oregon is uniquely positioned to do even better than the national average.

GDP for the state of Oregon was second only to North Dakota, growing at 4.7%. This was attributed to Oregon’s manufacturing sector which is quite a bit stronger than the National average.

The prediction was made that we should see continued economic growth this year and into the next few years. Bear in mind that this could change if something horrible happens such as a terrorist attack or a huge natural disaster.

Mr. Stone went so far as to suggest that our housing recovery will likely recoup the house values lost to the recession by 2016. That would mean a 20% growth in house values in the next 3 years. Personally, I feel that momentum is happening. Will it sustain? I hope so.

Mr. Stone also talked about a future housing shortage. This would happen because of our strict land use laws that make the development of new land for new construction a slow process. To have lots for new homes in 2015, that land needs to be in the development process now. And not much bare land is currently in that process. Builders suffered in the recession and just have not been positioned to have the resources to invest in land development. That is changing. New housing starts are on the rise and the builders are beginning to prosper.

The long and short of it is that with a low supply of land and a growing economy, there will likely be a housing shortage in the future. Economics 101 is about supply and demand. Low supply combined with high demand is what causes prices to go up.

No, I don’t have a crystal ball. Yes, I may be entirely wrong. But based upon what I heard at this year’s economic forecast session, 2013 should be a good year for the real estate market and that positive growth is likely to continue into the years ahead.

I sure hope so. We all deserve some good news.
Dianne

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News & Notes

thinkingA few tips from Linda:

* When pricing your home, please take all that your Realtor has shown you in the way of comps, and let yourself have some time to consider your options. There are various pricing strategies, but the most common one favored by Sellers is over-pricing. That is just a well-known fact to anyone in this business. It’s why, when a Realtor sells their own home, they usually ask for a reality-check from their peers : ) It’s natural, if you love your home, to believe it will fetch more than, perhaps, what your Realtor is telling you it will. It’s also natural, as the Seller, to be concerned about offers coming in below your “fair” price and therefore lowering that price… Much to your chagrin. I get it. I’ve sold my own homes too. BUT, I will tell you that, if you overprice your home, it will likely cost you money by:
– Sitting on the market too long, and giving the impression that “something must be wrong with this one”,
– Causing you to eventually have to lower the price anyway… probably lower than what you would have priced it at originally given these other factors, and the factor of time, and
– Keep Buyers away who are only searching in price ranges below your higher number.

* In a transaction where you are the Buyer, and “lender issues” are causing you to bump up uncomfortably close to your “on or before” closing date, your Realtor will most likely talk with you about writing up an addendum to “extend the closing date” to accommodate your lending timeline. You need to know though, that this is not a sure deal, and the Seller can say no. If your Seller says no, then you need to think seriously about terminating the transaction in writing before that date if you cannot “perform” (i.e., can’t get a loan).
– If your lending issues are related to you trying to get a better rate (as in… you qualified and would have closed on time, but you decided to try for a different loan package in the middle of the transaction), and your Seller does not agree to extend the date, you need to know that you may lose your Eanest Money. The contract states that you need to be able to secure a loan, so Buyers are generally protected if they can’t… BUT, not closing on time for this reason would not be related to that provision. You could secure a loan, but chose to try for a “better” one. Many Seller’s Agents will ask to see a statement from the Underwriter in these kinds of instances to check on just this kind of sticking point.
– If your loan problems are our of your hands, and you think you have good communication with the other parties, so decide not to bother creating an addendum extending the closing date (your lender could be slow, or you could really be having problems getting a loan), you could, again, potentially lose your Earnest Money, as the contract states “time is of the essence”, and in fact, that is a legal term that means that deadlines in the contract trump all other provisions. It has happened that a Buyer could not obtain a loan, had passed the closing date, and didn’t bother to get an extension addendum signed as they were still trying to make it happen & thought the Sellers were on the same page with them….. Later on, even though they really could not get funding, it was decided that the Sellers could keep the Earnest Money because there had been neither an addendum nor termination completed.

As always, Dianne and I are here for you, and would be happy to assist you in your home-buying or -selling adventure if you are not already working with another Realtor. We encourage you to listen to your Realtor. They are here to help you.
Enjoy the Oregon sunshine!

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Moving to Oregon

migration_map_2012

United Van Lines, the nation’s largest household goods mover, has just come out with their annual study of migration within the United States. This study is not based on total moves. It is based upon percentages. They have been doing this study since 1977.

So what happened in 2012? Oregon is the leading state for in-migration in the country. The only part of the country with a greater percentage of moves into their area was the District of Columbia. Oregon made this list with 61% of Oregon-involved moves being people moving into the state and just 39% of moves from people moving out of the state. Here are the top 5:

1. District of Columbia
2. Oregon
3. Nevada
4. North Carolina
5. South Carolina

Michael Stoll, an economics professor at UCLA, sights factors such as lower housing costs, temperate climate, diversified economies, and high-tech clusters as reasons that people choose to move to the leading states.

My opinion? I think it can be attributed to Microbreweries, Food Carts, easy access to snow boarding, hiking, camping, the beach, and Oregon wine country. And then there is the cult-hit, Portlandia. Portland, and the Portland food scene, have been written up several times in the New York Times with glowing reviews. This is a wonderful place to live, and it’s getting discovered.

In this past year I have personally helped two families make the move to Portland from out of the state. In both cases, they did some research and chose Lake Oswego because of the schools.

I think all of this is good news for our real estate market. It’s pretty basic economics of supply and demand. High demand supports high property values, and after the recent recession it feels good to hear some encouraging news.

If you are considering a move to Oregon, take a look at Lake Oswego. I think you’ll like what you learn. And if you need a great Realtor to help you with the move, please give Linda or myself a call. We would love to hear from you.

Best regards,
Dianne

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News & Notes

A few tips from Linda:

* Be cautious when looking into a “Lease Option” opportunity if one presents itself. For the Seller, it most always means that the bank can, at any time, call for all monies owing from you on the property per your mortgage’s “Due On Sale” clause, as you are technically transferring a form of ownership in an Option. I.e., you could be called upon to pay in full. Contrary to popular belief, setting up a Trust does not get you around the Due On Sale clause either. Best to consult with your Realtor, and/or attorney before embarking on an adventure like this : )
* Remember that all repairs agreed to in a transaction in the State of Oregon must be performed by a licensed, bonded contractor.
* Make sure to give your Lender plenty of time to “close” your transaction when writing your offer. Talk to your Realtor, and make sure to consult with your Lender to see about how long they need. Lately it is typically around 45 days, but each situation is different. Should you not meet your “on or before” closing date as per your Offer contract, the Seller could possibly accept another offer and keep your earnest money… just sayin’ : ) Now, most people will compromise and agree to an addendum extending the closing date, but you cannot guarantee that the Seller will agree to that… If they have, let’s say, received a better verbal offer than yours during the time it has taken to get from agreement to “not meeting” the closing date, they may just decide to opt to take that larger offer. Just a note of caution.

Let’s take a look at the recently released data on real estate for 2012.
Below is some information for you on the overall Portland area, as well as specific Lake Oswego/West Linn (RMLS lumps them together) activity:

According to the RMLS Market Action Report for the Portland Metro Area December, 2012. At 1,760, closed sales were 9.2% higher than December 2011 sales of 1,612. pending sales (or “Accepted Offers”) were down, however, with 1443 in December of 2011, and 1384 in December 2012… putting the market down by 4.1%.

  • 2012 racked up 32,300 new listings, 24,010 accepted offers, and 23,438 closed sales.
  • Compared to 2011, new listings are down 5.2%, pending sales are up by 16.2% overall, and closed sales are up 19.1%.
  • The average sale price in 2012 was $275,000, which is 4.4% higher than 2011’s $263,300.
  • ***AND… Total time on the market has dropped by 21.5% from 143 to 112 days.
  • The overall economic improvement and increase in volume has positively affected the numbers for total dollar volume which rose to $6.45 billion in 2012 from 2011’s $5.2 billion.
  • For our Property Blotter readers, the combined area of Lake Oswego and West Linn reported the following totals for 2012:
    • 2085 New Listings (68 in Dec’12)
    • 1389 Pending Sales (81 in Dec’12)
    • 1364 Closed Sales (108 in Dec’12)
    • An Average Sale Price of $434,800. ($512,100 in Dec’12!!)
    • Prices rose 1.5% in 2012 over 2011’s totals
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A New Year!

Oswego-LakeGreetings to all of our loyal and new Property Blotter readers!

As we enter our 5th year of publishing this insiders’ look at the Lake Oswego community and Real Estate scenes, we want to take a moment to thank you so much for your interest and patronage through the years! Dianne and I are as committed as ever to bringing you the micro-focused real estate information you count on, and also the perspective of Lake Oswego as part of the larger Portland Metro Area from time to time. Context is good… at least we think so : )

We both specialize in Lake Oswego property, considering the time we’ve spent living and working here, and we both also have been working all over the Greater Portland Area for many, many years, so please remember us if you know someone who needs a really experienced and reliable Realtor for any property “selling or buying adventure” in this larger geographic area!

Though our lives have changed through the years, the Property Blotter has remained constant, and we hope that you enjoy it as much as we do. Recently we have made one BIG change, and that is that we are now working with Oregon First Real Estate Company!  A change like this is the kind of thing that only occurs once in a very great while, and while we have been very pleased with our previous affiliation and will miss those with whom we’ve worked closely for some time, we are thrilled to be joining this vibrant, established local company with offices all over the Portland area and Vancouver!

Just for fun, I’ve pasted below our very first post from 2008, and after reading it, am feeling both nostalgic, and satisfied with the work we’ve committed ourselves to, and all we’ve accomplished with so many of you.

Happy New Year to each of you…. We toast YOU in 2013!

Welcome to the premier edition of the Property Blotter!

This blog is intended to be a fun and useful forum pertaining to real estate issues in the City of Lake Oswego. It will bring you information that directly reflects current market conditions.

It will also provide you with history of the area and insights into Lake Oswego’s vibrant community. You will find plenty of statistics and details about houses currently for sale and recently sold. You will also find neighborhood profiles and featured homes. And, yes, you’ll get commentary on local events and neighborhood happenings.

What you will not find is endless self-promotion and unneeded advertising. This is going to be a place to learn about Lake Oswego real estate and not a place that will waste your time. We don’t care for that sort of thing any more than you do.

And just who are we and why do we have any right to be doing this? We are Realtors who have each lived in Lake Oswego for some time and have been directly a part of this community. Between us we have 30 years of experience selling real estate in this fine community. Between us we have lived in Lake Oswego for 20 years. Our children have attended school here. We participated in sports here. We volunteered with local non-profits here. We know this town.

Lake Oswego is an amazing place to live. It is also seriously misunderstood. Yes, there are million-dollar homes in Lake Oswego. But more than money, Lake Oswego is a town that has people who care. It has always had great schools and so attracts families looking for excellent public schools. There are modest homes as well as lakeside estates.

If we are doing our job right, you’ll come away from this blog feeling like you know a bit more about what prices of homes are like, what is going on with local businesses, and what it is about LO that makes it a great place to live and to work. If you currently live here, you’ll know more about what your home may be worth. If you are thinking about moving here, you’ll know more about what to expect when you buy a home and what this community is like as a place to live.

So come along with us on this “blog-mobile”. It is going to be a great journey.

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Home Warranties 101

It has become common practice for both buyers and sellers to want a home warranty included in the sale of a home. It can be paid for by either because it is negotiable. Why are they popular? Because even with a good home inspection and full seller disclosure, problems can pop up after the buyer moves in. The warranty helps smooth the buyer through these issues during the first year of ownership.

What does a warranty usually cover? Warranties generally cover the mechanical functions of the house, but not the structure. So it covers the water heater, the plumbing, the electricals, etc. It does not cover the structure which is the roof, walls, windows, and foundation. Think of it like this, if it moves or affects temperature, it is probably covered. Most plans do not include the washer, dryer, refrigerator, or air conditioning, but for an additional cost, these items can be added to the policy. You can even add things like swimming pools and hot tubs.

How long do they last? Home warranties begin the day of closing and last for one year. At the end of the year, most warranties will offer the home owner an extension if they wish to purchase it.

Can I chooses the contractor to do the work? No, the warranty company contracts locally with service providers. If you need to make a claim, you call a 1-800 phone number to place a request. The warranty company then contacts their local contractor who will come to your house to do the repair. Each time you call there is a service charge. It runs from about $45 to $75. I suppose this is to keep people from just willy nilly abusing their policy. You aren’t going to call someone to change a light bulb for the cost of a service call, right?

What does it cost? Last week I telephoned 3 well-known providers and got quotes. You can get a quote on-line, but I just think it’s quicker and easier to pick up the phone. The cost will vary from location to location. This quote was for a house in the Portland metro area, but if you live outside of this area, it may be a different cost.

American Home Sheild 888-429-8247
This is the big boy in the game. This was the very first home warranty company I had ever heard of quite a few years ago. I had an American Home Sheild policy when I bought my own home.
The basic plan: $370
Add appliances: $480
I also know that AHS offers an option to cover the house from the moment it is listed for sale. So in other words, if something is found before closing, it can be covered. I recently sold a house in Lake Oswego that had an AHS policy that covered the basic, the appliances, the central air, and was retroactive to the date of listing. The total cost was $510.

Fidelity National Home Warranty 800-862-6837
The basic plan: $260
Basic plus air conditioning: $320
Basic + air + washer/dryer/refrigerator: $425
Fidelity National Home Warranty charges more than this if the house is larger than 5000 square feet. That may be true of the other plans as well. Pretty much the rule of thumb is that you need to call and get a direct quote for each specific property.

First American Home Warranty 800-444-9030
The basic plan: $290
Value plus which includes air conditioning: $420

I honestly think all of these companies are comparable. The pricing is competitive, but please call to get a direct quote. There are so many variables that affect the pricing. I’ve put this up to just give you a sense of costs.

Do these policies get used? Yes. I recall hearing that they get used an average of 2.7 times for each policy.

Let me tell you about my own experience. In the first year of owning my home I had trouble with my dishwasher. It was an older model, so I wasn’t surprised. I called American Home Shield for the repair. The cost of the repairs was going to be about $300. It seemed silly to spend $300 on an old dishwasher. I opted to apply that $300 towards a new dishwasher instead. I also used my policy for a furnace repair.

Be aware that the policy is for repair. As in my example above, it won’t necessarily help you to get all new appliances. Also, read through the policy so that you know what is covered and what is not.

I do recommend home warranties. I think if you have one, you are likely to use it. And that first year in a new home, when you have had all of the expense of the purchase, it makes the first year less stressful.

Let Linda or I know if you have any questions. As always, we are here to help.
Dianne

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Distressed Properties

The RMLS recently provided this graph to Realtors and I found it interesting. It occurred to me that you might as well.

It clearly shows that while distressed sales make up 17.2% percent of the new listings, they make up nearly 29% of the closed sales. Of that the shortsales are pretty consistent being 15% of the new listings and 13% of the closed sales. Whereas the foreclosures are just 13.2% of the new listing but account for 25.6% of the closed sales.

I do think that the banks are throwing houses out onto the market at pretty rock bottom prices. I’ve seen a few houses lately, priced so low, that half a dozen offers get written within days. Then the bank takes a week to respond and even more offers get written. This is a very negative thing for surrounding property values. What I am describing here is happening in much greater numbers outside of Lake Oswego, but I’ve seen some of it here as well.

The other interesting characteristic on this graph is the non-distressed properties. They represent 71.2 % of the new listings, but 61.1% of the closed sales. That 10% difference? I think that’s over-priced housing that has not adjusted to the reality of the current market.

I’ll work to find a happier subject for my next editiorial post, but I did find these graphs both useful and interesting.
Dianne

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Woodstove and Fireplace Inserts

Certification Sticker
My own woodstove
I am a huge fan of woodstoves and firplaces. My family actually ownes a mountain cabin that is heated with a woodstove. Building a fire is a skill and in my family we challenge each other to build one that is good enough to light with just one match. So woodstoves are near and dear to my heart.

So when the State Legislature passed a law in 2009 that affects woodstoves, I was very interested. This law, known as the Heat Smart for Clean Air Act, went into affect August 1, 2010. It requires the removal of non-certified woodstoves and fireplace inserts upon the sale of a house.

This law does not require the removal if a house is not sold. So you can continue to use and enjoy your non-certified stoves as long as you continue to own your home. It is only upon the sale of the house that they must be removed.

This law also applies to stoves and inserts that are in garages, shops, and out buildings.

Once the stove/insert is removed it can not be sold, given away or re-installed. In fact, it must be destroyed/recycled and evidence of this must be provided to the Oregon DEQ.

How do you know if your stove/insert is certified? There are 3 ways:

1. The Federal DEQ has been certifying stoves since 1992 and a stove sold after that year will have a Federal certification sticker on the stove.
2. The Oregon DEQ has actually been ahead of the Federal government on this and has been certifying stoves since the mid 1980’s. So, again, you’ll find an Oregon DEQ sticker on the stove.
3. A list of certified stoves by brands and models is maintained on line. Click here for that list.

Who’s responsible for removing the woodstove/insert? That is negotiable between the buyer and the seller. Either party can do it, but it has to be completed within 30 days of the sale. And be aware that many lenders would require it’s removal prior to the sale.

Does the woodstove/insert have to be replaced? No. Many older models were quite large. So removing them may benefit the house.

If you do replace it, the models made today are amazing and consist of pellet stoves, wood stoves, and masonry heaters. They are high efficiency with low emmissions. I have a client who heats his house with a pellet stove that he calculates saves him hundreds of dollars each winter.

Finding the certification sticker on your woodstove is easy. It should be on the back of the stove. Finding it on your insert can be tricky as you will have to pull the insert out of the fireplace opening to look for it. Try finding the insert on the approved list first. That could save you the work of pulling the insert out.

If you don’t find your make and model on the approved list, consider inquiring with a chimney sweep or the service department of a hearth product store. For a locator of these sorts of companies, click here.

Can you retrofit an old stove so that it can be certified today? No.

Why did this new law go into affect? The pollution caused by old stoves creates serious negative air quality that causes health problems, especially for older people and young children. It’s estimated that for every old stove removed, the savings in health care costs will be $3900. These old stoves can last decades. This law will speed up the process of removing and replacing these stoves. It is also believed that there are 80,000 uncertified woodstoves and fireplace inserts still in use in Oregon.

In addition, there are both State and Federal tax credits for installing new stoves. My understanding is that Oregon gives a credit of $300 and the Federal government is giving a credit of $1500. Please confirm these figures with your own inquiry or through your tax accountant.

Information for this post was obtained at www.ohpba.org/oregonlaws.htm

Good luck building your own one-match fire!
Dianne

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News & Notes

What’s Happening in Lake Oswego? ~

* Really Local Weather –   Three new weather stations installed at City Hall, the Golf Course and Westlake Fire Station are now recording temperature, wind speed & direction, relative humidity, dew point, soil moisture, soil temperature, precipitation and Evapo-transpiration.   CLICK HERE to access current local weather info.

* Portland International Film Festival in Lake Oswego – Feb. 10-16~  The Bank of Lake Oswego and The City of Lake Oswego are sponsors of the festival, and 16 films will be shown in Lake Oswego.  The festival showcases more than a hundred films around the world.  To see showtimes, location & purchase tickets CLICK HERE.

*Virtual Summit – To see the information presented at the Feb 2nd summit, and to add your own thoughts on “inspiring spaces & places”, and “Complete Neighborhoods & Housing”  CLICK HERE  .  The deadline for submitting comments is Feb 12th.

* Lake Oswego Rides Mink River – Feb 18th  ~  Join Mayor Hoffman for a themed bike ride that visits some of the city’s public work sites and runs along the river winding through Sister of the Holy Names & to the Art Spot. Gather at 9:45 for a 10:00AM bike ride at Millennium Plaza Park.  The ride is 10 miles, and registration is completed by calling 503 675 3730.

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Bouncing on the Bottom

I know this is risky. There are all sorts of possibilities that I’ll be wrong and you will be able to come back to me a year from now with “It’s only gotten worse. You were WRONG.” But I am going to take the risk and put this in writing. I think that the housing market is bouncing on the bottom. If there is downturn yet to do then I think it will be minor. And there is even a chance that there will be upturn.
No, I’m not a Nationally recognized economist. Really, what do I know? What I know is that I am down here in the trenches living in this house market. And I see 2 signficant changes.
First, the cash investors are out buying BIG TIME. I am working with 2 cash buyers right now both wanting entry level houses of $150,000 or less. This is partly due to low house prices as compared to high rent rates making the return on rentals look good. But this is the same formula that will turn renters into home buyers. It’s starting to make sense to buy entry level houses because the rents are now getting as high or higher than a house payment.
Second, when I show property I am now finding that more and more houses are going pending. It’s like Christmas is over, the prices and interest rates are incredibly low, so now is the time. Lockbox activity (meaning the number of times lockboxes are opened by Realtors to access listings)has skyrocketed. It always goes up after the holidays, but not like I’ve seen it in the last two weeks.
I am also seeing more positive economic news in the media, including this short article from the Oregoninan on January 10, 2010:

Home values in Portland are predicted to rebound
Portland-area home values fell 3.5 percent during 2011 but are expected to stabilize and even post an increase in 2012, real estate research firm Clear Capital reports.
The California company forecasts a 1.9 percent increase in home values in the Porltand-Vancouver-Beaverton area.
In the company’s ranking of 50 major metro areas’ home prices, that moves Portland from No. 27 in 2011 to No. 14 in 2012. Exactly half of the markets are expected to post home price increases. The Portland market is also among 20 considered to be stable in 2012 with predicted increase or decrease of less than 2.5 percent.
The company also reported 15.5 percent of homes sales in 2011 were bank-owned forcloseures.
U.S. home prices fell 2.1 percent in 2011 and are expected to gain 0.2 percent in 2012, the firm reports.
The Seattle area was one of the hardest-hit markets in 2011, posting a 15.1 percent decline in prices. Clear Capital predicted the city’s real estate would lose 7.5 percent in 2012.

Certainly time will tell. I understand I might be wrong, wrong, wrong. But there is also a pretty good chance that I am right. We will see…
Dianne